THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

WOLF BLITZER, CNN ANCHOR: To our viewers, you're in THE SITUATION ROOM. Happening now: Republicans can go back on the attack after a relatively tame debate in Iowa. Did any of the candidates give a breakout performance? We are going to hear from undecided voters and the best political team on television.

Plus, the Republican leader in Iowa right now, Mike Huckabee, on Mormons, Jesus and the devil. He speaks out about the remarks that forced him to tell Mitt Romney he's sorry. Mike Huckabee's interview with me, that's coming up.

And it's now a dead heat in New Hampshire. Hillary Clinton's lead is history in our brand-new poll. Barack Obama is breathing down her neck, not only in Iowa, but now in New Hampshire as well.

I'm Wolf Blitzer. You're in THE SITUATION ROOM.

The Republican presidential race in Iowa is a high-stakes, bare- knuckle brawl, but you wouldn't necessarily know it by watching today's GOP debate. Still, die-hard Republicans who turn out for the Iowa caucuses may have learned a thing or two about some of the issues they deeply care about.

Let's go to our chief national correspondent, John King. He's on the scene for us in Iowa.

It was a chance, three weeks before the January 3, caucuses for these Republicans to try to close some sort of deal. I suspect it didn't really happen today, though, John.

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: Well, we will see over time, Wolf, the impact of this debate.

But you're right. It was the last debate among the Republicans before Iowa votes in just three weeks. So, Republicans on stage, as you might expect, a lot of talk about cutting taxes and cutting spending.

But the one issue that Iowa Republicans tell us they care most about barely came up at all.

(BEGIN VIDEOTAPE)

KING (voice-over): Feisty, it was not. This early exchange on taxes providing one of the few mild flash-points.

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: I'm concerned about the taxes that middle-class families are paying. They're under a lot of pressure.

FRED THOMPSON, REPUBLICAN PRESIDENTIAL CANDIDATE: Well, my goal is to get -- my goal is to get into Mitt Romney's situation, where I don't have to worry about taxes anymore.

(LAUGHTER)

(APPLAUSE)

THOMPSON: But 5 percent...

(CROSSTALK)

(LAUGHTER)

(CROSSTALK)

ROMNEY: ... trying to get into your situation.

(LAUGHTER)

THOMPSON: Five percent -- well, you know, you're getting to be a pretty good actor.

(LAUGHTER)

KING: The prospect for fireworks faded at the outset when the most dividing line of the Republican race was taken off the table.

REP. TOM TANCREDO (R-CO), PRESIDENTIAL CANDIDATE: I have to ask you a question.

WASHBURN: I have to keep moving. I have to keep moving.

TANCREDO: And the question is how are you going to convince America that you have in fact changed your mind on...

WASHBURN: Congressman Paul?

TANCREDO: ... immigration from when you were a governor? That's all I want to know.

WASHBURN: Congressman Paul?

KING: No answer allowed, so few sharp exchanges, but some risky snippets. To farmers in Iowa and elsewhere, this from Senator John McCain.

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: I will also eliminate subsidies on ethanol and other agricultural products. They are an impediment to competition. They're an impediment to free markets. And I believe that subsidies are a mistake.

KING: Absent fireworks, the last GOP debate before Iowa votes in three weeks became a competition to show conservative credentials.

Cutting taxes was popular.

RUDOLPH GIULIANI (R), PRESIDENTIAL CANDIDATE: A flatter tax, a simpler tax that you could file on one page as an option would be a good idea.

KING: Cutting spending, too.

ROMNEY: And the sacrifice that we need from the American people, it's this: It's saying let the programs that don't work go.

WASHBURN: Thank you.

ROMNEY: Don't lobby for them forever.

REP. RON PAUL (R-TX), PRESIDENTIAL CANDIDATE: We maintain an empire which we can't afford. We have 700 bases overseas. We are in 130 countries.

KING: When the topic turned to improving education, former Senator Fred Thompson took aim at the nation's largest teacher's union.

THOMPSON: The biggest obstacle, in my opinion, is the National Educational Association, the NEA.

(END VIDEOTAPE)

KING: After the debate, there were complaints from several of the campaigns that the format was simply too restrictive. They said more interaction between the candidates would help voters make their choices.

But, Wolf, with three weeks to go until Iowa votes, safe to assume those policy differences will come up over the next three weeks -- Wolf.

Meanwhile, the Democratic candidates, they're getting their last shot on the debate stage in Iowa tomorrow.

Candy Crowley is standing by to tell us what we can expect. But, first, there has been another bombshell coming out of New Hampshire. Our brand-new CNN/WMUR poll shows, Hillary Clinton and Barack Obama are now in a dead heat in the leadoff primary state.

Let's go to our senior political analyst, Bill Schneider.

(BEGIN VIDEOTAPE)

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Wolf, in politics, New Hampshire is supposed to be the firewall state. But the firewall may not be holding.

(voice-over): New Hampshire is supposed to be Hillary Clinton's firewall. If she loses Iowa, New Hampshire is her must-win state. But look at what's happening in the Granite State. The Obama fire has spread to New Hampshire.

In the latest CNN/WMUR New Hampshire presidential primary poll conducted by the University of New Hampshire, the state is now neck and neck -- Clinton 31, Obama 30.

Is it the Oprah effect? Oprah Winfrey campaigned for Obama in New Hampshire this weekend. Obama gained seven points among women, but he picked up 10 points among men.

SCOTT SPRADLING, WMUR POLITICAL ANALYST: Our pollster is confident that there may have been a couple points worth, but that the trends themselves are much larger than any one visit any one weekend.

SCHNEIDER: What could be bigger than Oprah? Here's a clue. Clinton continues to lead among registered Democrats, but Obama is ahead among Independents.

New Hampshire voters say Obama is least like a typical politician. He's become the anti-establishment candidate.

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: The American people are paying attention to not just change political parties in the White House, but change how politics is done in Washington.

SCHNEIDER: New Hampshire has often been friendly to anti- establishment candidates like Gary Hart in 1984 and John McCain in 2000. They both won the New Hampshire primary with strong supports from Independents, though neither won their party's nomination.

What's happening on the Republican side in New Hampshire? Nothing. Mitt Romney is still leading. Mike Huckabee has picked up a few points, but he's still running fourth. New Hampshire's not Iowa.

SPRADLING: Here it's less socially conservative. You get more of the Independent, but fiscal conservatives, so that core group that's supporting Huckabee doesn't necessarily exist in as big of numbers here in New Hampshire.

SCHNEIDER: Republicans have not coalesced behind an anti- establishment candidate. Both Independents and registered Republicans are voting for Romney.

(on camera): Isn't the straight-talking John McCain supposed to be the Republicans' anti-establishment candidate? He was in 2000, but not now. Asked which candidate sounds least like a typical politician, New Hampshire voters told us they're not sure -- Wolf.

(END VIDEOTAPE)

BLITZER: Bill Schneider, thanks very much.

And given what's now happening in New Hampshire, Hillary Clinton may have even more to prove when she squares off with her Democratic presidential rivals in Iowa tomorrow.

Let's bring in our senior political correspondent, Candy Crowley. She's with the CNN Election Express out in Iowa.

Let's set the stage for this Democratic debate tomorrow, Candy, 2:00 p.m. Eastern. It will be seen here live on CNN, the stakes clearly for the Democratic top-tier candidates enormous.

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: Absolutely.

I mean, what's happening here is, it's really hard to underestimate -- overestimate the heightened tensions here. The Clinton campaign has begun to talk about Barack Obama's electability. They have begun to talk about his experience. They have gone so far -- Billy Shaheen, who is the co-chair in New Hampshire, came out today and talked to "The Washington Post" saying that he thought that Barack Obama's past cocaine use, which Obama has been very open about, really would make him more unelectable because the Republicans would only ask questions about whether he ever gave cocaine to someone else.

The Obama campaign shot back and said, listen, they have gone from attacking his kindergarten record to his teenage years. This looks like desperation.

So, as you can see, it is ratcheting up here, which makes tomorrow's debate not just the last debate, but probably the most important debate for what happens here in Iowa. There was a local poll done that showed as many as 60 percent of Iowa caucus-goers actually hadn't decided yet. So, we're getting to a pivotal moment.

BLITZER: Three weeks to go. We're watching every second.

Candy, thanks very much.

Jack Cafferty is watching this and a lot more. He has got "The Cafferty File" from New York -- Jack.

JACK CAFFERTY, CNN ANCHOR: How long have we been listening to the politicians talk about our need to reduce our dependence on Middle East oil? I think it goes back to 1973, the Arab oil embargo; 34 years ago, I think, is when it started in earnest.

Well, the House actually passed an energy bill last week that would mandate the first major increase in fuel economy standards in more than 30 years. It would require automakers to raise their corporate average fuel economy, or CAFE standard, by 40 percent to 35 miles per gallon by the year 2020. That bill is now pending in the Senate.

Supporters say it would save the United States 1.1 million barrels of oil a day, which is about half the oil that we currently import from the Persian Gulf region. Enter the lobbyists for big oil and the car companies. They're working overtime to kill this bill.

The White House is threatening to veto it. "The New York Times" says President Bush is echoing the position taken by the auto manufacturers and a coalition of industry groups, including the oil companies. What a surprise.

They say they're concerned about who would regulate the new 35- mile-a-gallon standard. How hollow does that sound? The government creates massive ineffective bureaucracies at the drop of a hat. Are you familiar with the Department of Homeland Security? But they're threatening to veto the first meaningful energy bill in 30 years because they don't know who will enforce the standards.

Our dependence on Middle East oil is at the heart of a lot of our current problems. But, like everything else, the big corporations have a stranglehold on the federal government.

Here's the question. How much influence should corporations have over energy legislation? E-mail your thoughts to caffertyfile@CNN.com or you can post a comment on my blog -- Wolf.

BLITZER: You heard those presidential candidates today. All of them pay lip service, got to end the dependence on imported oil from the Middle East. But you're absolutely right. We have been hearing that for decades. Hasn't happened yet, has it?

CAFFERTY: Nope.

BLITZER: All right, Jack, thanks very much.

Jack is going to be coming up with the best political team on television. And we are going to assess what happened at that debate and more.

Fierce rivals attack each other on the campaign trail, but in one incident Mike Huckabee now says he's sorry to Mitt Romney.

(BEGIN VIDEO CLIP)

MIKE HUCKABEE (R), PRESIDENTIAL CANDIDATE: I said, I would never try, ever, to try to somehow pick out some point of your faith and make it, you know, an issue, and I wouldn't.

(END VIDEO CLIP)

BLITZER: So, why is Mike Huckabee now apologizing? My interview with him coming up. You are going to find out if Mitt Romney accepted that apology as well.

And what were voters most and least impressed with in this Iowa debate? You will see exactly what excited and what bothered actual voters, undecided Republicans, who are trying to make up their minds right now.

And, attention, parents -- a major drug company now recalling a common childhood vaccine.

Stay with us. You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: Mike Huckabee walked into the final Republican debate before the Iowa caucuses in a whole new position. The former underdog now is the top contender, in this, the first contest of the presidential primary season. And that also makes him the target of some scathing attacks and fierce scrutiny.

(BEGIN VIDEOTAPE)

BLITZER: The former Arkansas governor is joining us now from the site of this debate.

Governor, thanks very much for coming in.

And let me ask you right away, what did you think? How did you do?

HUCKABEE: Well, I think the debate went fine. It was frankly a little less fireworks than I anticipated, but believe me, Wolf, I'm very fine with that. I was kind of anticipating there would be blood on the floor, most of it mine. And fortunately, I came out with -- without a Band-Aid.

BLITZER: And that's from your standpoint very good, because you now are in all of these most recent polls in Iowa the favorite right now to win. And that normally means you have a bull's eye, but I didn't see a lot of these candidates really directing their aim at you during these 90 minutes.

HUCKABEE: Well, I didn't, either. I think they have saved it for the mail and for television, because there's sure enough of that out there.

The post office is having a heck of a month, and Christmas has nothing to do with it, in Iowa. A lot of mail pieces out there, a lot of negative TV ads. we will see how it works.

I don't think it's going to. I think it's going to have a sort of a counter-effect, but if I'm wrong, I'm wrong. I just am convinced that people here want a positive campaign, and that's what we're trying to give them. I think that's why we're ahead right now.

BLITZER: All right. "The New York Times" Sunday magazine has a long profile of you, and one line has jumped out and is causing a lot of commotion right now.

When you asked this question to the interviewer, the reporter who wrote the story, you said this: "Don't Mormons believe that Jesus and the devil are brothers?" Now, as you know, Mormons say that's a canard, they don't believe that, that's been a canard spread by people who don't like Mormonism.

I want you to explain what you were doing by even raising that question.

HUCKABEE: Actually if you will talk to the reporter, because he was shocked that that was characterized out of an 8,100-word story, as we were, we thought, good heavens. We were having a conversation. It was over several hours, and the conversation was about religion, and he was trying to press me on my thoughts of Mitt Romney's religion.

And I said I don't want to go there. I don't know that much about it. I barely know enough about being a Baptist. And I really didn't know.

Well, he was telling me things about the Mormon faith, because he frankly is fairly well-schooled on comparative religions. And so as a part of that conversation, I asked the question, because I had heard that, and I asked it not to create something -- I never thought it would make the story.

After the debate today I went to Mitt Romney and apologized to him, because I said, I would never try, ever, to try to somehow pick out some point of your faith and make it, you know, an issue, and I wouldn't. I have stayed away from talking about Mitt Romney's faith. And I told him face to face, I said, "I don't think your being a Mormon ought to make you more or less qualified for being a president." That has been my position.

Wolf, everybody I have talked to just about wants me to come out and say something about Mitt Romney's faith. I have not taken the bait, but if I don't say something, they say that my avoiding it is really an underlying statement. If I do say anything, then I'm attacking him.

So I'm not sure how to deal with that, but I certainly am not in any way getting into that. And as I said to him, I say to you, I don't think his particular religion is a factor in whether or not people should vote for him or against him.

I would like to think that my being a Baptist isn't a factor in people voting for or against me, although in Arkansas, when people say, are the Baptists active in your campaign, I always say they're all active, half for me and half of them against me, but it certainly didn't mean that they automatically voted for me.

BLITZER: So how did he react, Mitt Romney, when you went up to him and you said -- you apologized, I guess, for that one quote?

HUCKABEE: Well, he was gracious. You know, I hope he knows it was sincere. But, you know, I'm trying to stay away from everything I can say. I'm being much more cautious now, because everything is being parsed.

And heck, not just the things I'm saying now, but, you know, we have got a lot of people dumpster-diving right now in the political process, and they're going through every old wastebasket they can find to dig up anything I have ever said, but I understand. I went through this in Arkansas, it's part of the political process. It's not something I'm shocked by, not something I wasn't expecting.

If anything, I'm kind of delighted that it's happening, because there's no way that this wouldn't be happening if I wasn't scaring some people to death.

BLITZER: By a lot of estimates, Governor, you're going to win in Iowa, at least if the election were today, the caucuses were today. But people are saying, you know what? He doesn't have the organization, he doesn't have the money to really take that win in Iowa and really go anywhere, because in New Hampshire it's a much different picture.

What do you say to those cynics out there who say, you know, even if you win in Iowa, it's not going to mean a whole lot?

HUCKABEE: Well, whatever we do, somebody has an excuse for why it's not enough. I was never supposed to be here, remember? I was the guy that wouldn't get past the spring. I was the guy that wouldn't make it through the summer.

I was the guy that would be a second-tier candidate through the whole process and wouldn't even get to the caucuses. So everything that's been written about my political obituary so far has been wrong. Hopefully it still will be.

I just am always reminded that a ragtag army of under-equipped, under-financed, under-trained and under-prepared people won the Revolutionary War. Underdogs always have a history, and it's not -- there's an old saying in the South -- it's not the side of the dog in the fight, it's the size of the fight in the dog that determines the outcome. And there's a lot of fight in this dog.

I have been through a tough battle in Arkansas, fought the Clinton political machine and beat it four times. I understand something about the kind of political environment in which I'm playing just because I have had to win as a Republican in a state that didn't have any. So the fight in this dog is ready for it.

BLITZER: Well, you better get ready, because you have got three weeks now before Iowa, and I suspect it's going to get heated, even more heated than it is right now.

Governor, you have had a long day already, and I suspect your day is only just beginning. Thanks for spending a few moments with us here in "The Situation Room."

HUCKABEE: Glad to do it, Wolf. Thanks for having me back.

(END VIDEOTAPE) BLITZER: A spokeswoman, by the way, for the Church of Jesus Christ of Latter Day Saints says, Huckabee's question about Jesus and the devil usually is raised by those who wish to smear the Mormon faith, rather than clarify it.

She tells the Associated Press -- and let me quote precisely -- "We believe, as other Christians believe and as Paul wrote, that God is the father of all. That means that all beings were created by God and are his spirit children. Christ, on the other hand, was the only begotten in the flesh. And we worship him as the son of God and the savior of mankind. Satan is the exact opposite of who Christ is and what he stands for" -- that statement from a spokeswoman for the Church of Jesus Christ of Latter Day Saints, the Mormon Church.

Meantime, Mitt Romney sounds ready to move beyond Huckabee's remarks about his faith and his apology, the Romney campaign issuing a statement after Huckabee's apology, the statement saying: "The governor accepted the apology. He continues to believe that this campaign should not be about questioning a candidate's faith. While it is fair to criticize an opponent's record or policy positions, it is out of bounds for one candidate to question another's personal faith."

Thirteen million dollars and counting -- Iowa is awash in a sea of pricey political commercials. You may be surprised who is spending the most right now.

And, in Iraq, attacks as bold as they were bloodthirsty, terrorists using one bomb to draw a crowd, another bomb to strike those onlookers, and a third bomb apparently to ensure maximum casualties. Now dozens are dead. Many are in shock, all this unfolding in Iraq.

We will be right back.

(COMMERCIAL BREAK)

BLITZER: Carol Costello is monitoring some other important stories incoming to THE SITUATION ROOM right now.

What's going on, Carol?

CAROL COSTELLO, CNN CORRESPONDENT: Well, Wolf, it's the deadliest attack against Iraqi civilians in four months, three car bombs exploding minutes apart today at the main market in the southern Shiite town of Amarah, at least 41 killed, 150 wounded. The attack happened just days before Britain was expected to hand over a neighboring southern province. It is the last remaining province under British control since the 2003 invasion.

Hundreds of thousands of people in the Central Plains and the Midwest still without power because of that major ice storm. Could be up to 10 days before electricity is fully restored. The storm now being blamed for at least 27 deaths. It's left ice more than an inch thick across much of the area. Merck & Company is recalling more a million doses of a childhood vaccine because of contamination risks. The vaccine prevents meningitis and pneumonia and is known as Hib. It's given to infants as young as two months old. The company says, as far as it knows, no children who received the vaccine experienced any problems.

But just be aware of that, parents -- back to you, Wolf.

BLITZER: All right, Carol, thanks very much.

They were undecided when the debate started. Are they decided now? Iowa Republicans tell us who did best and who might get their vote.

The GOP candidates insist on keeping their hands down. You could call it a mutiny. And does our new poll from New Hampshire show a Democrat in freefall? Can Hillary Clinton bounce back? Is she the comeback kid, like her husband? The best political team, Jack Cafferty, Jeff Toobin, and Gloria Borger, they're standing by -- right here in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: To our viewers, you're in THE SITUATION ROOM.

Happening now: what voters think in real time about the debate performance of the candidates. The dial-a-meter gauges positive and negative responses to their answers. Did it detect a clear GOP winner today?

And a new poll in New Hampshire could spell serious trouble for Democratic front-runner Hillary Clinton. It shows her lead deteriorating. Now it's a real horse race, not only in Iowa, but in New Hampshire as well.

And Mike Huckabee gets heat for asking a question about Mormonism, God and the devil. The comment prompted him to apologize to rival Mitt Romney, as you just heard. We are going to talk about all of this, a lot more, with the best political team on television.

I'm Wolf Blitzer. You're in THE SITUATION ROOM.

The Republican presidential candidates have had their say. Now the voters have theirs. After today's Iowa Republican presidential debate, the last before Iowa's caucuses on January 3, we asked some undecided Republican voters what they thought.

Let's go to CNN's Mary Snow. She's in Johnston, Iowa.

Mary, there were lots of opinions. But what are the bottom lines?

MARY SNOW, CNN CORRESPONDENT: Bottom line, Wolf -- and you're probably not going to want to hear this -- is that there is still a lot of confusion. We talked -- we sat down with 21 registered Republicans who were still undecided. They have just about three weeks to go. They left this debate saying they hadn't chosen a candidate. Some are getting closer.

(BEGIN VIDEOTAPE)

SNOW (voice-over): Thirteen women, eight men -- all registered Republicans, all undecided about who they'll support in next month's Iowa caucus.

Watch what happens as this focus group listens to the Republican presidential candidates debate.

MIKE HUCKABEE (R), PRESIDENTIAL CANDIDATE: Our founding fathers that when we are elected, we're not elected as a part to be elevated up, but to truly remember who it is we work for. I think sometimes that's what's happened in America -- we forget that our job is to keep this country safe, first and foremost. And it's to try to encourage Americans to be their best at everything they do.

(END VIDEO CLIP)

SNOW: This segment of the debate received one of the strongest responses from this focus group. These undecided Republicans were asked to move the dial when they liked what they heard and when they didn't.

Another moment that registered with these undecided voters came when Rudy Giuliani talked about cutting government spending.

RUDY GIULIANI (R), PRESIDENTIAL CANDIDATE: The strength of America is not a central government. The strength of America are its people. Restrain the central government, give people more choice, more money to spend, we're going to see our economy booming.

(END VIDEO CLIP)

SNOW: In the end, Giuliani was seen as having the strongest performance at the "Des Moines Register" debate. But this group didn't have high expectations for him going in. They did expect Mike Huckabee to win the debate. But some walked away not convinced they'd support Huckabee.

GREG LASCHEID, UNDECIDED IOWA REPUBLICAN: I kind of was a little bit disappointed with him.

SNOW (on camera): Why? What was it that he said?

LASCHEID: It's not what he said, it's what he didn't say. Perhaps maybe not so big on big government, that really is things that I would like to see done.

PATTY RISINGER, UNDECIDED IOWA REPUBLICAN: I thought that I might like Giuliani a little bit more and I wasn't as impressed with him.

SNOW: Why?

RISINGER: I don't know. There was just something about the way he delivered, maybe, the information, that it just didn't seem like he was as strong.

(END VIDEO TAPE)

SNOW: And, Wolf, we just want to stress these are unscientific results. We just wanted to get the pulse of some of the voters here. We did ask them -- we have two political communications professors who ran this data today and asked the participants in this group, who do you think will win?

And they thought that Giuliani would win, followed by Mike Huckabee. Then when they were asked, who would you vote for today, they voted Mike Huckabee, in terms of who they would vote for, followed by Rudy Giuliani. So, overall, many said they liked Mike Huckabee, but they felt that Rudy Giuliani would win nationally -- Wolf.

BLITZER: Mary Snow.

Thanks very much.

Mary is going to do the same thing with the Democratic presidential candidates tomorrow. That debate 2:00 p.m. Eastern.

CNN will carry it live.

Let's talk a little bit about the GOP debate right now.

Joining us, our senior analyst,

Jeff Toobin. He's in New York. His best-selling book about the U.S. Supreme Court is called "The Nine".

Also in New York, Jack Cafferty. His best-seller, "It's Getting Ugly Out There".

So what do you think, Jack, with a little reflection -- it's been a few hours now since we watched that debate.

CAFFERTY: Boring.

(LAUGHTER) CAFFERTY: It was I mean, it was a yawn. It was very Republican. They were all pretty congenial. It was the last debate. You could tell everybody was on their best behavior. Nobody wants to make a mistake. There was a cute little exchange at one point between Romney and Fred Thompson. It was -- it could have gotten nasty, but it didn't. It was all good-natured stuff. Nobody jumped, arguing with Mitt Romney about being a Mormon.

I mean it was -- it was a very Republican event and the Democrats, hopefully, with the decline of Hillary in the polls and stuff in New Hampshire, that should be, maybe, more interesting tomorrow. The bar isn't very high, though.

BLITZER: Well, we're going to talk about the Democrats in a moment.

But, Gloria, weigh in on what we saw at the GOP debate.

GLORIA BORGER, SENIOR POLITICAL ANALYST: You know, I agree with Jack. I think one of the reasons all of those voters that Mary Snow was talking to remained undecided was because you didn't really get beyond the candidates' platitudes. Iraq and immigration were taken off the table. And any time the candidates started to engage and differentiate among themselves, the moderator kind of acted like a human speed bump and said no, no, no...

TOOBIN: ...are there -- are there more candidates than voters in the Republican caucuses?

I mean, you know, Alan Keyes was brought in, I think, from the planet Neptune...

CAFFERTY: Yes.

TOOBIN: ...to sort of, you know, bring an intergalactic perspective. I mean, you know, why he was allowed to debate is so absurd. I mean he's not running a campaign for president. CAFFERTY: Well, and they spent a bunch of time with him.

TOOBIN: Why is Duncan Hunter there?

BORGER: Right.

TOOBIN: I mean it's just...

BORGER: Because he had a campaign office in the state.

TOOBIN: It's just ridiculous.

(CROSSTALK)

CAFFERTY: I mean at one point they asked Alan Keyes what he would do to guarantee transparency in the White House. He has as much chance of being in the White House as I do. I mean it's just a waste of everybody's time. It's nonsense.

TOOBIN: It was ridiculous.

BLITZER: There -- the criteria were that you had to have a staff person and an office in Iowa. He apparently met that requirement.

Interestingly enough, Dennis Kucinich -- he's not going to be in the Democratic debate tomorrow because he apparently doesn't have an office or a staff person working in Iowa.

TOOBIN: Well, and that's good.

BORGER: And, Wolf...

TOOBIN: That's good, but...

BORGER: Wolf, I'll...

TOOBIN: ...I mean I just think, you know, these are debates about who's going to be president...

BORGER: Right.

CAFFERTY: Yes.

TOOBIN: ...not people who are trying to build up their lecture fees or satisfy their egos.

This -- so why not put the only people -- only people who actually have some even remote chance of being president?

BORGER: Wolf, I talked to some of the Republican campaigns after the debate. They felt the same way about having to respond to Alan Keyes and, also, they felt that they had missed an opportunity in this debate to engage with each other so that the people of Iowa could see their differences rather than their platitudes.

BLITZER: All right, guys... TOOBIN: There was actually a great moment in the debate, if you listen very carefully, when Alan Keyes started talking. If you listen carefully, you could hear John McCain saying, "Oh, jeez."

BORGER: Oh, yes.

TOOBIN: Which I thought, you know, spoke -- he -- that was, perhaps, the most eloquent statement in the entire affair.

(LAUGHTER)

BORGER: Right.

BLITZER: All right, guys, stand by, because we're going to move over to the Democratic side in a moment.

She was the frontrunner.

So what happened to Hillary Clinton's lead in New Hampshire?

And what about reports of some to serious problems inside her campaign?

We're going to talk about that.

Plus, Mormons, Jesus and the devil -- you're going to find out exactly what Mike Huckabee said about his Republican presidential rival Mitt Romney. It's still causing controversy. You heard what Mike Huckabee said in our interview just a few moments ago.

Stay with us.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: We're back with the best political team on television.

Jack, let me start with you.

Look at this poll, this new CNN/WMUR New Hampshire presidential primary poll. Hillary Clinton now at 31 percent, Barack Obama at 30 percent, John Edwards 16. Everybody else down in single digits. This is a race not only in Iowa -- where he's ahead in some of the polls -- but now in New Hampshire.

CAFFERTY: Well, it's more than a race, it's a collapse. Hillary was 20 points ahead in New Hampshire as recently as a month ago. So I don't know if it's Oprah Winfrey, I don't know if it's the drivers licenses for illegal aliens, but it's coming down like a house of cards. And late this afternoon -- I just read this before I came out here -- a top adviser to the Hillary campaign told "The Washington Post" in an interview that perhaps Democrats should revisit the fact that Barack Obama owned up to smoking some pot when he was a kid.

Now, this is from the camp that is partially represented by Bill "I didn't inhale and what the meaning of is is" Clinton.

(LAUGHTER)

CAFFERTY: So, you know, for them to start dragging stuff around like marijuana use when some guy was a teenager, I mean that's wrong for those people to be going there.

BLITZER: Gloria...

(CROSSTALK)

BLITZER: Let me let Gloria weigh in.

BORGER: I think that comment was probably a freelance comment, Wolf, which the campaign may not have wanted. Because, at this point, they're starting to shift their strategy a little bit because they realize that Hillary the nasty campaigner and the nasty Hillary Clinton campaign does not work. And so they're going to try and turn that around a little bit in these last weeks, because they realize that while people think she's tough, they really don't like her. And they've got problems on that front. That's part of the reason she's not doing so well.

TOOBIN: And I just think it's worth emphasizing that a close poll in New Hampshire is a much bigger deal for the Clinton campaign than it is in Iowa.

BORGER: Right.

TOOBIN: They had always said from the beginning that Iowa was a tough state for Clinton. But they've also always said we're very strong in New Hampshire. But think about the reasonable prospect now of Hillary Clinton losing in Iowa, then losing in New Hampshire.

What happens to her campaign then?

BORGER: Again...

TOOBIN: I mean that is a completely different scenario.

BORGER: You know, Jeff, I actually discussed that with somebody in the Clinton campaign and they're now talking about how strong they are in South Carolina.

There's one line in an upcoming Sunday "New York Times Magazine" article, a profile of Mike Huckabee, in which he asked the reporter well, what do you think about that?

CAFFERTY: Well, it sounds to me -- now I listened to the interview with Mike Huckabee this afternoon. It sounds to me like he might have got trapped a little bit by a reporter who was a little cagier than he was, at least at that moment. I think the fact that he got out front of the release of this story in the "New York Sunday Times" by apologizing to Romney today tends to take some of the steam out of that issue.

But, nevertheless, you can bet it'll be beat around pretty good on the all the talk shows on Sunday, probably including "LATE EDITION," huh, Wolf?

BLITZER: I suspect it will be.

Gloria, what do you think?

BORGER: Well, this is obviously good for Mitt Romney because he's out there over the paid commercial airwaves attacking Mike Huckabee on his position -- positions on immigration. And so, in this particular case, he gets to look magnanimous. Huckabee apologizes to him and he accepts his apology with grace. But, of course, this isn't bad for Mitt Romney right now because he gets to look like he's above the fray when, in fact, he isn't.

TOOBIN: Well, but...

BORGER: On the other hand, it reminds people that he is a Mormon.

TOOBIN: Well, yes. See, I'm a little less sure that it's so great for Romney. And I think Romney is reaping a little bit of what he's sewn here. Because remember, I mean when he gave his big speech last week, he didn't say what John Kennedy said -- that separation of church and state should be absolute. He said faith is the most important thing to me and faith is central to government. But he didn't say anything about what his faith is.

BORGER: Right. You know...

TOOBIN: And, you know, I mean that's not -- I don't think it's unfair to ask someone who says faith is central...

CAFFERTY: Well, the other...

TOOBIN: ...what his faith is. CAFFERTY: Well, the other thing that happened is somebody apparently asked Romney to explain or answer that question that Huckabee raised about whether Jesus is the devil's brother. And Romney said that's already been addressed by the church leaders in Salt Lake City.

Well, that's exactly the problem -- according to the polling that's been done -- that Romney has with being a Mormon. There is concern that the church has too big a role in dictating to the lives of its members. And that makes some people a little bit uneasy. And that -- as Gloria suggested, that -- this brings attention back to that a little bit.

BLITZER: All right, tomorrow, we're going to do the same thing. We're going to assess what happened in the Democratic presidential debate, guys. So don't go anywhere. We'll see you back here tomorrow.

Jack has still got the Cafferty File coming up today.

Lou Dobbs is getting ready for his show that begins right at the top of the hour. He's going to give us a preview of what he's working on -- Lou.

LOU DOBBS, HOST, "LOU DOBBS TONIGHT": Well, Wolf, I'm glad you guys sorted out the role of God and politics in this country.

Coming up here on CNN next, two of the most important issues for voters all around the country -- besides, of course, God and politics -- in Iowa, as well as the nation -- those issues, the war in Iraq and illegal immigration.

Guess which two issues the GOP candidates were forbidden by the moderator not to discuss in today's debate?

We'll have the latest for you on which candidates did what and to whom and how they did in this afternoon's debate.

And most of the presidential candidates -- Republican and Democrat -- have decided to close the God gap. Those political leaders of the free world are invoking religion and God at almost every turn. I'll be talking about the role of religion in this campaign and the role of God in American political life with one of the country's most influential religious conservatives, Tony Perkins, here tonight.

And I'll be talking with Congressman Ted Poe about his fight to win justice for one of his constituents.

Join us for all of that, all the day's news and a lot more, 7:00 p.m. Eastern on CNN -- Wolf, back to you.

BLITZER: See you in about 15 minutes.

Thanks very much, Lou, for that.

The presidential hopefuls spending big time on advertising in Iowa. We're going to show you just how much cash they're doling out and who's spending the most.

And Jack Cafferty asks how much influence should corporations have over energy legislation?

Jack with the Cafferty File.

You're in THE SITUATION ROOM.

(COMMERCIAL BREAK)

BLITZER: The mainstay of any debate is information used by the candidates to build their case. Today was no different.

Let's bring in our special correspondent, Frank Sesno.

He's been doing some fact checking for us -- so, Frank, who was naughty today and who was nice?

Let's start with Rudy Giuliani and issue of abortion. It's a tough issue for him and a big one in Iowa. He said he wants limitations on abortion. He said I brought those about in New York City. We reduced abortion and we increased adoptions.

Well, we looked into that, it's true. Giuliani reduced abortions -- or abortions reduced under Giuliani by about 18 percent.

But guess what?

They were going down across the country and they were going down rather dramatically across the country during those years. Nevertheless, in 2000, the CDC reported that the highest numbers of reported legal induced abortions occurred in New York City. "New York" magazine, just two years ago, wrote that New York was the abortion capital of America.

So Giuliani has a very tough sell on this one. He may have over stretched a bit.

BLITZER: What about Romney?

SESNO: Romney made several points. The one that caught our attention was on the issue of education, because he bragged about his first graders and his eighth graders on math and English scoring -- number one in math and English. He got his history right, but gets an incomplete on context there.

Because guess what?

Those test scores that he cited have been going up since 1992. So he was really reaping the rewards of the hard work -- the homework that the students and some others had done before him.

BLITZER: And John McCain? SESNO: John McCain went into the issue, along with some others, of energy. And he said he thinks that America should be energy independent in five years. That is a really tall order -- if for no other reason than just look at the oil imports. Oil -- our oil production has been going down for 20 years. Our oil imports have been going up. You would need to do everything right and then some to be really energy independent (INAUDIBLE).

BLITZER: And I know you've studied that subject for a long time.

SESNO: I looked at it closely (INAUDIBLE).

BLITZER: Frank, thanks very much.

Frank Sesno, our special correspondent.

Let's go back to Jack.

He's got The Cafferty File -- Jack.

CAFFERTY: The question this hour is how much influence should corporations have over energy legislation?

There's a bill that got through the House -- it stalled in the Senate, the president is threatening to veto it -- that would mandate an increase in mileage of our cars by 2020 to 35 miles per gallon.

Ken writes: "The corporations should have zero influence. Nothing in Washington will change in until we use tax dollars to finance election campaigns. It sounds expensive at first, but it will save us billions in corporate welfare to the energy, pharmaceutical and insurance industries alone."

Pete in Ohio writes: "The bill in question is useless. Thirty- five miles per gallon by 2020 is laughable. That should be a five year goal at minimum. Corporations should be leading the way in energy research. If there's any legislation at all, it should be significant tax incentives to any company or individual who is devoting time and money to finding clean, renewable sources of fuel and energy. The free market will find a solution much quicker than lethargic, ineffectual bills such as the one in question."

Don in Kansas writes: "Energy companies should have some influence. They are authorities in the field, after all. But there must be sturdy boundaries between policy and profit."

James in Leon, Kansas: "Corporations should have almost no influence over our government, period. Most of our problems in America and our government were caused by large corporations lobbying our elected officials and putting them in the pockets of these corporations instead of working for the people who elected them."

And Bob writes: "How much influence should the foxes have over the policies in the hen house?" -- Wolf.

BLITZER: See you tomorrow, Jack. Thanks very much.

CAFFERTY: Yes.

BLITZER: Checking our Political Ticker right now. President Bush today vetoed a second bipartisan bill to expand a popular health insurance program for children known as SCHIP. In a statement, the president said this new bill is unacceptable because he claims, like the first bill, it will allow adults into the program and raise taxes. This is the president's seventh veto in office -- all but one coming since the Democrats took control of Congress in January.

Three weeks before the Iowa caucuses, presidential candidates already have spent more than $13 million on TV ads alone. That's a figure from CNN's exclusive consultant on TV ad spending. Most of the money -- more than $8 million -- was spent by three Democratic frontrunners there.

On the Republican side, Mitt Romney has spent a hefty $4 million on TV ads.

Remember, for the latest political news at any time, check out our Political Ticker at CNN.com/ticker.

When a show of hands is a no go, when is that?

Apparently, during a presidential debate.

Jeanne Moos is standing by with a closer look at today's momentary Republican rebellion in Iowa.

(COMMERCIAL BREAK)

BLITZER: It's not easy being a debate moderator. I can testify to that personally. It's one part journalist, one part traffic cop, one part schoolteacher. In the spirit of that analogy, CNN's Jeanne Moos looks at a Moost Unusual response received by the moderator of today's GOP debate in Iowa.

(BEGIN VIDEOTAPE)

JEANNE MOOS, CNN CORRESPONDENT (voice-over): Running for president is a little like a school kid saying, pick me, pick me, pick me. Only when it comes to being treated like schoolchildren...

KEYES: ...I think the most important emission we need to control is the hot arrogance of the politicians.

(END VIDEO CLIP)

MOOS: Did he say hot air? Forget hand raising. What candidate Ron Paul is trying to raise is a blimp. A supporter created this mock up of the blimp flying past a celestial Ron Paul. (VIDEO CLIP OF ELECTION BLIMP)

MOOS: As the debate was underway in Iowa, what's believed to be the first ever presidential campaign blimp was being readied in North Carolina -- its launch delayed because the "Who Is Ron Paul?" banner got held up. Besides, the weather is not so hot for a helium blimp.

KEYES: See, your unfairness is now becoming so apparent that the voters in Iowa must understand there's a reason for it.

(END VIDEO CLIP)

MOOS: Let's hope Ron Paul's blimp doesn't take a dive that steep.

Jeanne Moos, CNN, New York.

(END VIDEO TAPE)

BLITZER: Tomorrow, it's the Democrats' turn in Iowa. Their presidential debate starts at 2:00 p.m. Eastern. We'll be here for live coverage then. Please join us for a special expanded edition of THE SITUATION ROOM right after that debate ends at 3:30 pm Eastern.

We're going to do tomorrow the same thing we did today.

And now, by the way, you can also take the best political team with you anytime, anywhere. You can download the best political pod cast at CNNPolitics.com. Just go there anytime and you'll get it.

Until then, thanks very much for joining us.

I'm Wolf Blitzer in THE SITUATION ROOM.

Up next, "LOU DOBBS TONIGHT" -- Lou.

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